Property developer Hans Fast in the Mount Pleasant neighbourhood in Vancouver, on Sept. 15. The proposed first rezoning under the city's Broadway Plan will turn five single family homes into a building with 175 rental units.Jimmy Jeong/The Globe and Mail
The first application has been made to rezone a row of houses on a quiet Vancouver side street in order to build a 19-storey rental tower, as allowed under the city’s redevelopment framework for the Broadway neighbourhood.
It’s been 16 months since the Broadway Plan was approved – and the first proposals are now moving to the formal rezoning application stage.
The tower site is located in the centre of a quiet tree-lined block made up of detached houses. The five houses assembled are from 523 to 549 E. 10th Ave., and are a 10-minute walk from the future Mount Pleasant subway station at East Broadway and Main Street.
It is, far and away, the biggest project for the street, and also the largest for developer Hans Fast, owner of Fastmark Development. The city has received eight rezoning applications in total for the Broadway Plan area, as well as more than 100 rezoning inquiries. But this is the first rental tower application to be made on a side street within the Plan, instead of an arterial.
The Broadway subway project, a 5.7-kilometre extension of the Millennium line, triggered the creation of the Plan. The intent is to add 30,000 new homes over the next 30 years, particularly in neighbourhoods close to transit stations. The Plan area encompasses 500 city blocks, bordered by Clark Drive to the east, Vine Street to the west, 16th Avenue to the south and 1st Avenue to the north.
Not surprisingly, the Plan is expected to transform the city: there are swaths of land slated for mid- to high-rise towers throughout Kitsilano, Fairview and Mount Pleasant neighbourhoods. Other zones, currently a sea of single-detached housing, are earmarked for six storeys.
“This is the first pure Broadway Plan proposal that we are aware of that’s been posted on the city of Vancouver website,” says Mr. Fast, whose business may only be three years old, but has four projects in the pipeline, including two townhouse projects in the Cambie Corridor and another rental planned for downtown.
His father Paul Fast is the founder of the large engineering firm Fast + Epp, and he has siblings in construction and architecture. Mr. Fast says a building of 18- or 19-storeys in Vancouver typically costs about $100-million to build, and like most developers, he has an investment partner for the E. 10th project. It is a significant risk, particularly when construction costs are high. But he’s done his due diligence and he intends on holding on to the 175-unit rental as part of a growing portfolio, including a privately run daycare with 25 spaces on the ground floor.
Mr. Fast, who has two small children of his own, can relate to the need for daycare.
The child care amenity allowed him to go from 18 storeys to 19 storeys, according to city policy, he says. There will also be 33 below-market rental units, or 20 per cent of the floor area, required by the city. Because it’s on a bicycle path, and to encourage less car use, there will be 344 bicycle spaces and 110 car parking spaces.
The tower checks all the boxes that were set out within the Plan, so he’s hopeful that it’s a relatively straightforward process. However, he expects some neighbourhood pushback.
“This neighbourhood is historically anti-development, and so we are expecting pushback from neighbours, because it’s also on a quiet street,” says Mr. Fast. “But the Broadway Plan got approved for density on quieter streets, so that’s just the way the city is going.”
He says his project will transform the street with its height and density, and there will be unavoidable disruption during construction. The street is leafy and shady with mature trees, but he expects that he will be able to retain many of the larger trees in front of his property. A lot of the trucks can enter the site through the laneway, but in order to pour concrete there will be street closures.
“City council, they do have the ability, they could obviously reject the proposal. But we have also met with the majority of the council members and they have expressed support for the project. There is below-market housing, [market] rental and child care. I don’t know a better project you could ask for.”
New market rental units are renting in the $5 to $5.50 per foot range, which would mean around $2,500 for a 500-square-foot unit. That’s to be expected for a central location, said Mr. Fast.
The properties Fastmark has purchased are a mix of owner-occupied and renter-occupied houses in a neighbourhood of mainly single-family detached and duplexed houses. They are located in an area targeted in the Broadway Plan as a section that allows for one 18-storey tower per block.
Mr. Fast could not disclose any information about the sale, but commercial brokers Avison Young had assembled the five houses and listed the package for $19.375-million more than a year ago. The five houses are assessed at $9.3-million in total.
Many well-capitalized developers were definitely looking at the site, but Mr. Fast doesn’t know how many others bid on it.
“It definitely is a risk, but we have already submitted to the city and we went through a three-month-long intake process with the city where they did a preliminary process to check if the application meets plan policy. And through that process we were able to gain enough comfort and de-risk also to the standards of our lenders. They did their own due diligence with their planning consultants to see if it’s feasible.”
A public hearing won’t likely be held for another year, which adds to the timeline, and the costs. Mr. Fast said it would be helpful if the process were fast-tracked to make their jobs easier. He said the federal government’s recent announcement that they’d waive the GST on rental construction was a win, but his industry needs more wins.
“We have to go through the whole site-specific rezoning, even though it’s designated under the Broadway area plan. It’s complicated, but unfortunately, that’s the way it is in Vancouver,” he says.
When asked why the developer has to apply to rezone even though the tower is allowed under the Broadway Plan, a city spokesperson said the Plan did not rezone the lands. Instead, it provided opportunities to rezone properties according to the Plan.
Commercial brokers Mark Goodman and Ian Brackett said they know of three formal rezoning applications for rental towers under the Plan, but the Fastmark application is the first on a side street. The other nearby applications they’ve seen include Reliance’s two-tower proposal at 130 W. Broadway and Westbank’s tower at 2015 Main St., both on arterials.
“We will see a lot more of these rezoning applications for single-family houses and duplexes becoming public,” says Mr. Goodman. “We are getting tons of calls all the time for proposals, and we’re meeting with owners.
“In some cases, we list the properties and in others, we elect not to move forward because price expectations can’t be met.”
Mr. Brackett said several of the early proposals for rezonings fall within single-family and duplex housing areas. The city confirmed that the Plan allows for rezoning proposals for residential rental apartments on side streets in several areas.
“Not all of those will move to full formal rezoning applications, but we do expect there will be many more proposals like this in [those] areas coming forward over time,” said Mr. Brackett. “While it will certainly be a big change for these areas, these sites often don’t have major tenant displacement concerns which has been a big point of contention in [predominantly apartment] areas and along the major arterials.”
Mr. Goodman said the demand from developers is “muted” right now, due to costs. He recently sold one assembly of four houses and a small multifamily rental building at Main and E. 33rd Avenue for $11.5-million, after some negotiation. The site was outside the Broadway Plan and allowed a six-storey multifamily rental.
“Unfortunately there’s a narrative out there that developers have limitless amounts of money and are willing to throw caution to the wind, but in this climate with rising costs and interest rates … there are tons of challenges they face right now,” said Mr. Goodman.
Because it’s a slow process, Mr. Brackett said he expects it will take about seven years or more before a new project is completed.
Editor’s note: This article has been updated to clarify a statement from Hans Fast regarding the City of Vancouver’s support for his firm’s 19-storey Broadway Plan development proposal.